LNG World Shipping

Tornio boosts Baltic LNG momentum

Coral Energy delivers a commissioning cargo to the Manga LNG terminal in Tornio in November 2017

A key seedbed of LNG bunkering activity, the Baltic Sea is welcoming a new wave of investment in the infrastructure needed to fuel gas-powered ships

The delivery of the 18,000 m3 coastal LNG carrier Coral EnergICE by Neptun Werft’s Rostock yard to Anthony Veder on 25 January 2018 has opened up a new phase in Baltic LNG shipping.

The first such vessel to be built to the ice-class 1A Super standard, the newbuilding is the largest of the growing fleet of coastal LNGCs active in the region and is able to serve all the Baltic Sea LNG terminals, including those in ports that are ice-bound throughout the winter months.

Adding Finland to the mix

Coral EnergICE has been taken on long-term charter by Skangas, the LNG terminal-operating affiliate of Finland’s Gasum. Skangas will use the vessel to deliver LNG to its two Finnish receiving terminals – Pori on the south coast and the Manga facility in Tornio, the northernmost port in the Bay of Bothnia.

Pori, which features a 30,000 m3 storage tank, commenced commercial operations in September 2016 while the Manga facility, with its 50,000 m3 tank, is currently going through the commissioning process. The largest LNG receiving facility in the Nordic region and due to be fully operational by mid-2018, Manga LNG is a joint venture with Gasum, Outokumpu, SSAB and EPV Energy.

The Manga LNG terminal is able to supply LNG bunkers in addition to regasifying LNG and loading LNG road tankers. One of the ships it is fuelling is Arctia Icebreaking Oy’s Polaris, a dual-fuel icebreaker whose two LNG bunker tanks provide 800 m3 of capacity and 10 days of autonomous operation on gas in typical winter conditions.

Coral EnergICE represents a strengthening of the Baltic shipping links between Skangas and Anthony Veder. The gas company already has two of Veder’s coastal LNG carriers – the 6,500 m3Coral Anthelia and the 15,600 m3Coral Energy – on charter, as well as the 5,800 m3 LNG bunker vessel Coralius that Veder owns jointly with Sirius Shipping.

These ships are frequent visitors to the other Skangas LNG terminals in the Nordic region, namely the Risavika and Øra facilities in Norway and Lysekil in Sweden. Whereas Øra and Lysekil, like Pori and Manga, are receiving terminals, the Risavika plant near Stavanger is a production facility, able to liquefy up to 300,000 tonnes per annum of LNG.

Baseload receivers

There are also two Baltic Sea baseload LNG import terminals in operation, Polskie LNG’s shore terminal in the Polish port of Świnoujście and the 170,000 m3 floating storage and regasification unit (FSRU) Independence operated by Höegh LNG in the Lithuanian port of Klaipeda. By means of these facilities, Lithuania and Poland became LNG import nations in December 2014 and June 2016, respectively.

Świnoujście received, on average, one cargo a month last year but that delivery rate is set to double in 2018. The terminal operator has also embarked on a project to increase the LNG regasification capacity of the facility by 50%, to 5.6 million tonnes per annum (mta) by 2021.

The expansion programme includes the development of LNG bunkering infrastructure; facilities to enable loading, discharge and transhipment operations involving small and medium-scale LNG tankers; and rail loading points to facilitate the dispatch of cryogenic ISO tank containers.

Klaipedos Nafta (KN) has chartered the regas vessel Independence until 2024, at which point it has an option to buy the FSRU. The 2.2 mta unit is not only assisting Lithuania reduce its dependence on Russian pipeline gas but also, like the Polskie LNG terminal, providing a springboard for the development of small-scale LNG infrastructure in the region.

In September 2017 KN began commissioning its new shoreside terminal, which features five 1,000 m3 cylindrical pressure vessel storage tanks, in another part of Klaipeda harbour. Like most Baltic Sea LNG receiving facilities, the KN installation is capable of reloading cargoes.

Start-up operations at the site kicked off with the ship-to-ship (STS) transfer of 1,000 m3 of LNG from Independence to Shell’s new 6,500 m3 LNG bunker vessel Cardissa. Cardissa then moved to KN’s reloading station to discharge her cargo to the first two tanks at the installation ready to receive LNG. The liquefied gas was then pumped into road tankers at the facility’s loading bays for onward distribution.

Hive of bunkering activity

The designation of the Baltic and North Seas as IMO sulphur emission control areas in 2006 and 2007, respectively, supported the emergence of northern Europe and Scandinavia as the birthplace of LNG bunkering.

Although the concept is now spreading globally, the Baltic and North Seas still play host to over 80% of the world’s LNG bunkering activity and remain the focus for most new investments in fuelling infrastructure for LNG-powered ships.

Nynäshamn, operated by AGA and the second of Sweden’s two LNG receiving terminals, has been one of the world’s leading providers of LNG bunkers since Viking Line’s dual-fuel passenger/car ferry Viking Grace entered service in 2013. A delivery system based on using road tankers and a 180 m3 cross-harbour bunker vessel ensures that the 57,000 gt Viking Grace is fuelled with Nynäshamn LNG at its Stockholm berth virtually every day.

Viking Grace provides a daily service between Stockholm and the Finnish port of Turku and burns around 23,000 tonnes of LNG per annum. In October 2017 Viking Line contracted a second LNG-fuelled ferry for the Stockholm-Turku link, a vessel of 63,000 gt that will commence operations in early 2021.

The AGA terminal is also set to provide the LNG fuel for a pair of dual-fuel ferry newbuildings that Rederi AB Gotland will put into domestic service on the route between Nynäshamn and the island of Gotland. Nauticor, like AGA part of the Linde Group, has won the contract to supply the bunkers and both 32,000 gt ferries, Visborg and Thjelvar, are set to enter service in 2018.

To support its nascent Baltic LNG bunkering service, Nauticor, in co-operation with KN in a venture called Blue LNG, will charter a 7,500 m3 LNG bunker vessel that Bernhard Schulte Shipmanagement (BSM) and Babcock International are having built at the Hyundai Mipo yard in Korea. The vessel, which is due for completion in September 2018, will use the KN reloading terminal in Klaipeda as its home base.

Only the start

The Baltic Sea projects outlined above mark the start of the blossoming relationship that the region’s gas and electric utilities, shipping companies and industrial enterprises are developing with LNG. Plans for the construction of further LNG bunkering and distribution terminals in Lubeck, Rostock, Riga, Paldiski, Hamina, Helsinki, Turku, Gävle, Liepaja and Muuga are being progressed.

Two additional baseload receiving terminal schemes are also under review – an FSRU for the Russian enclave of Kaliningrad and a new shore terminal in Brunsbüttel to serve northern Germany.

Gazprom is due to take delivery of its 170,000 m3 FSRU Marshal Vasilevskiy from Hyundai Heavy Industries in June 2018 and inaugural employment in Kaliningrad is an option under review.

Market demand for the Brunsbüttel facility, which would be Germany’s first LNG import terminal, is currently being assessed. If the response is positive, it aims to begin receiving cargoes in late 2022. Brunsbüttel is connected to the Baltic via the Kiel Canal, a handy link for bunker vessels and gas-powered ships wishing to make use of this new LNG source.